Geithner’s new proposals for mechanisms that would push companies to restructure their own executive compensation packages go well beyond limits already in place in the initial Wall Street bailout program, known as TARP, because they will apply even to companies that have not taken government money.
The new rules will focus on “systemically important financial firms,” said a government official with knowledge of the proposal. “The principals of reform are aimed at getting the financial incentives of employees closer aligned with the interests of their overall institutions.”
The executive-compensation recommendations are part of the hotly anticipated financial-regulatory package that Geithner will present Thursday before House Financial Services Committee Chairman Barney Frank (D-Mass.) as part of a hearing called “Addressing the Need for Comprehensive Regulatory Reform.”
The biggest part of the secretary’s plan, and also a priority for Frank, is greater control over “systemic risk”: updating regulations to reflect the current reality that it’s not just banks that dominate the financial system, but also insurance companies and hedge funds. It’s a way for the government to oversee financial markets as a whole, rather than the individual components.
http://www.mlive.com/us-politics/index.ssf/2009/03/geithner_to_call_for_new_bonus.html
Retention bonus are not extortion. When a company is in trouble and the are afraid that good employees will leave for other jobs because they will be offered a new job at a more stable company at the same or better pay (some times less in trade for the stability)they make an offer to the employee. If you stay for X period of time we will pay you your salary + Y (this can be done in increments). If the employee stays for the agree upon time they are paid the “bonus.” It’s a payment for risk. In Frank’s view the employees have to be forced to stay in their positions even if they want to leave. In his view apparently involuntary servitude is allowed. There is nothing the employee can be offered to stay longer and they also apparently can’t leave. You can tell he’s never been in the private sector. Well, except for the short time when his boyfriend was running the “escort service” out of Frank’s home. I’ll bet his boyfriend provided “escorts” for Barney’s friends and people who were lobbying him too.
Ha! Is it extortion when the Treasury Department and the Congress okays it? I’m just wondering, because the Democrat members of Congress never do anything wrong, supposedly.
No Bawny...what you’re advocating IS extortion...that’s what putting a gun to a man’s head and relieving him of contractually derived earnings. My grand ancestors fought a war because of a king or two who could’nt keep their hands off of their subjects earnings. Sorry you regret signing the contract. As a taxpayer, I regret you signed the contract. But be grateful... contract law, if followed, will spare you from the king’s fate.